Editor’s Note
This article reports on the signing of a major bilateral trade agreement between India and the United Kingdom. The deal, finalized after extensive negotiations, represents a significant deepening of economic ties between the two nations.
India and the United Kingdom have signed the Comprehensive Economic and Trade Agreement (CETA), a bilateral free trade agreement marking a major milestone in their longstanding partnership. The agreement was signed by Commerce and Industry Minister Shri Piyush Goyal and UK Secretary of State for Business and Trade Mr. Jonathan Reynolds in the presence of Prime Minister Shri Narendra Modi and UK Prime Minister Sir Keir Starmer. This follows the successful conclusion of negotiations announced on May 6, 2025, and reflects the shared ambition of two major economies to deepen economic ties. Bilateral trade has already reached USD 56 billion, with a target to double this by 2030.
CETA provides an unprecedented duty-free access to 99 per cent of India’s exports to the UK, covering nearly 100% of the trade value. This includes labour-intensive sectors such as textiles, leather, marine products, gems and jewellery, and toys as well as high-growth sectors like engineering goods, chemicals, and auto components. This will spur large-scale employment generation, empowering artisans, women-led enterprises, and MSMEs.
At the same time, India has opened 89.5 % of its tariff lines covering 91 % of UK’s export. Only 24.5 % of UK’s export will enjoy immediate duty free market access. India has safeguarded sensitive sectors like dairy, cereal, millets, pulses, certain essential oils, apples, certain vegetables, gold, jewellery, lab grown diamonds. Strategic exclusions also cover critical energy, fuels, marine vessels, some polymers, worn clothing, smart phones, optic fibres. For strategically important products where domestic capacity is being built, for example under Make in India or PLI, India will provide gradual tariff reduction over 5, 7 or 10 years. India has gradually and selectively opened her markets to alcoholic beverages.
India’s current position as the 13th largest plastic supplier to the UK, duty free access presents opportunity to tap into the UK’s robust demand for plastics—films, sheets, pipes, packaging, tableware, and kitchenware—segments where India has proven manufacturing strength. India’s exports to UK in FY 2024-25 were around USD 0.509 Bn with top products including Flexible Intermediate Bulk Containers (FIBC); Optical Fibres Optical Fibre Bundles & Cables; Sacks &Bags; Decorative Laminates and Plates, Sheets, Film, Foil and Strip, etc.
The agreement goes beyond goods and addresses services, a core strength of India’s economy. India exported over USD 19.8 billion in services to the UK in 2023, and CETA promises to expand this further. The agreement includes a wide-ranging package covering Information Technology /IT enabled services, financial and professional services, business consulting, education, telecom, architecture, and engineering that will unlock high-value opportunities and job creation.
In a first by UK, mobility for professionals across IT, healthcare, finance, and education is being eased with CETA providing for streamlined entry for Contractual Service Suppliers, Business Visitors, Intra-Corporate Transferees, Independent Professionals. Another major breakthrough is the Double Contribution Convention that will save Indian firms and workers more than INR 4,000 crore by removing the need for dual social security contributions.
With measures that promote mobility, innovation, and inclusivity, CETA is expected to create jobs, boost exports, and strengthen India–UK economic resilience.
– Commerce and Industry Minister, Shri Piyush Goyal
